This is what I’m expecting at the open as of 9:09AM ET in the S&P 500 between 9:30-11AM based on the current futures.
Best case scenario: At the open we test 2020, but run into an upward 4 that retraces nearly 382 back to 2045 of the 1.618 W3 down..that would essentially put a halt to the beef of the downside momentum of the downward 3 and/or bottom the market. The VIX just happens to be in the 20’s at this point and over the past year, “normal” W2 corrections have bottomed with the fear at that level.
Worst case scenario: There’s an immediate strong fade to test 2000-2006 or the full 1.618 downward in the S&P 500, but after testing that level, we’d see that 382 W4 back to the 2033-2035 level.
Where I’m leaning this morning: We may fade to test 2000-2006, but in either case we’re going to likely see a 382 W4 rally, or even better yet, if the fade does happen, the VIX will rocket to the mid 20’s and this quick violent Wave 2 correction would essentially be over before a new impulse.